tv Bloomberg Markets Bloomberg September 1, 2016 10:00am-11:01am EDT
vonnie: we will take you from mexico city to paris and london and geneva. doolittle has breaking economic data in the u.s.. the irs and manufacturing number out for the month of august and it is below 50 at 49.4 -- we have the i.s. m manufacturing number. it's well below the number for july at 50 to six. ism manufacturing is a mess and we look at the majors. this is a chart of the i.s. and over the last three years. not numb -- not much of a reaction. will be tracking this throughout today to see if there is something of drag. the importance of being below 50
signals the economy is back in the contraction. it's the dividing line between action". taking a look at the 10 year yield, it was up slightly ahead of this report is basically up slightly, taking a takedown but essentially where it has been before. thes look at the effect on dollar. ae dollar index has taken takedown, up ever so slightly. sm have amisss for the i manufacturing for the month of august. we have the automobile sales for the month of august from the big the u.s. including ford, general motors and chrysler. we saw misses in terms of the sales numbers but we see the stocks are up modestly except for chrysler. for forward, the company managed
to raise its average price per vehicle by $1200 over the last year. it looks like gm could have beaten the western -- a whisper number on the street. vonnie: fascinating, thank you. manufacturing is in contraction but some of the subcomponents are interesting. what's going on in london? 90 minutes left in the thursday session and we finished august high for the month, the second monthly increase with banks rising for third consecutive day come over 6% in the last three days. it's the biggest three-day advance since a. june 12 we are rising today so let's look at the banks. biggest increase last month for u.k. banks on the ftse 350 bank index since 2010. since brexit, the gauge has
risen by 6%. loseve seen eurozone banks 6%. us on a valuation basis that we've got the ftse 350 trading at 12 times euro areaearnings, banks at nine times to the widest disparity in four years. that's a lovely charge to start this day. deutsche bank is extending gains on the report that commerzbank analyze the sale of all parts of its asset management business. it's exploring options to revive profit. senior managers are meeting this weekend to debate options and i may adjust financial targets set in october. this is according to a wall street journal report. the bank is exploring the potential merger with commerzbank, its biggest rival.
over the last three days, commerzbank is up 3.8% and deutsche bank is up 5.8%. the biggest news came out of the u.k. mi rebounding from a three-year low of 48.3. that was in july and that was post-brexit and went to 53.3. we are at the highest levels since last december. the big help was the weak sterling and new orders rose and sterling has dropped and that's the main factor for the improvement in exports. what does it tell us about the durability of the u.k. economy post-brexit? that's the big question we will continue to put it out there. game fort was good for the british pound. let's get to first word news.
licia: donald trump returned perform on immigration. he madeech in phoenix, it clear that he is still intends to build a wall on the southern border of the u.s. and has mexico pay for it. he ruled out legal status for undocumented immigrants. >> there will be no amnesty. obtain legal status or become a citizen of the united states by illegally entering our country. : yesterday, trump flew to mexico city to meet with the mexican president and he says the two did not discuss the border wall but the mexican president contradicted him. we will have more in a few minutes. an explosion has rocked the floridaaunch site in
and nasa says they were conducting a test firing its unmanned rocket when the blast occurred. this test is usually routine and was planned in advance of a saturday launch from cape canaveral. we have live pictures with buildings that shook several miles away from the blast. multiple explosions continued for several minutes and the rocket was supposed to hoist an weekend.atellite this we will continue to track this story. -- nearlyent the 12,000 migrants have been rescued this past week. tightened ats were the border of turkey and austria. the new brazilian president says the worst is over. he was sworn in after the senate voted to impeach suspended and now former president on the recep. his first job -- former president dilma rousseff.
he said include spending caps and pension cuts. global news, 24 hours a day, powered by more than 26 hundred journalists and analysts in more than 120 countries. this is bloomberg. mark: let's get the market. from central banks to companies around the world, the currency faced tumultuous times recently including a rate fixing scandal, the brexit vote in a new report from the international settlement shows the currency market has proved to be resilient in the face of threats. report, somehe might be surprised by the fact that we did not see a bigger decline. this is anly, important survey that comes out once every three years. size of you what the the big liquid market is.
we have had quite a lot of things going on in the fx market with scandals and big bank fines. some were expecting a bigger decline. mark: where are the big fx centers? does it remain in new york and london? >> they are still the big powerhouses. new're up it shows that york has stagnated and london has lost some shares and the focus is shifting to asia. we have singapore, hong kong, those are the markets but it's obvious because you see the share of currencies being traded. of thelook at the volume euro, that has come down and if you look at the japanese yen, that has come down but if you look at the yuan, that has increased and those are traded in asian centers. the way the currency
market is being treated is different than three years ago. spot trading is down 19%. tell us about jobs. just as i pointed out, we have had a lot of problems in the fx market and that spot trading number is important as it's the first time that it has declined since 2001. drop isrt says that what has fed into this overall from $5.4ll fallen trillion to 5.1 trillion. if you are a spot trader come you don't automatically become a swap trader? >> that's one thing. we asked analyst what this really means. as of now, the sense we are getting from analysts, the
this isreaction is that not that bad a number from what we were expecting. yuan has rise of the to be one of the key takeaways from this report. its increasing its share of the currency market and it has arrived is one of the major currencies of the world particularly in emerging markets. >> we need to remember the imf has done this review. spr basket so the it sows -- it shows the predominance of the yuan. it shows the troubles we have had in europe and the u.s.. the yuan is the key take away and it has taken everybody by surprise. this share has increased, almost doubled, and it is climbed up. mark: it's overtaken mexico. >> that's right. what can you say about
the pboc shifting away from trading the u.s. dollar when you see that 95% of that was with the u.s. dollar? >> that is something we are looking at. you need to remember that you look at what's happened to the euro and the u.s. the pboc faces challenges but at the same time, it's an endorsement for the yuan ahead of it being intuitive. that's the key take away. has its programs -- problems and there are doubts but at the same time, foreign-exchange markets are looking at the yuan as a good candidate. vonnie: fast and a report once every three years. thanks for breaking it down. coming up donald trump doubles down on immigration after his meeting with the mexican theident and we will decode
mark: live from london and new york, i'm mark barton. vonnie: you are watching bloomberg markets. time for the latest bloomberg business flash. of a healthy labor market a day before the august jobs report, fewer americans than forecast filed first time claims for unemployment benefits last week. and alignment rose but had been below 300,000 for the longest stretch since 1970. u.s. light vehicle sales missed estimates and ford said it sold fewer discounted models to fleet buyers while pickups and suvs
saw a rare decline. the cap truck fell 6.1% and the explorer fell 16% and car sales plunged 25%. russia does not see a need for an oil production freeze as long as prices stay around $50 per barrel. will resumesia talks with other producers only if prices fall. nations and other oil producers meet n.l. jeers next month to discuss a freeze and other issues. that's our latest bloomberg business flash. in a speech in arizona last night, donald trump laid out a
plan and emphasize the central piece of his strategy. >> we will build a great wall along the southern border and mexico will pay for the wall. he reiterated his call for a while in the same day he met with the mexican president. the two men came away with different accounts of what was discussed. megan murphy in washington has more. happenedof what yesterday was theater and how much was actual intentions on the part of donald trump? got to separate it a lot of this was theater and donald trump trying to strike a more diplomatic tone and show people that he can hold sway with world leaders and talk about important themes. and terms of relaunching his campaign in terms of trying to put that image in front of americans, we had this dispute about who said what in terms of paying for the great wall.
i think the jury is still out on whether this will help them with voters other than his hard-core base. what about the meeting with the mexican president? it was controversial in mexico. they were saying that this is something that went against what and theyould be about should be saying they are against these kind of policies. it's interesting to see whether he has grabbed extra voters after his speech in arizona last night with is the opposite of mexicociliatory tone in and doubled down the policies that can be described as mass deportation of them -- of illegal immigrants in this country and building that wall. mark: he did not back away from a pledge to keep illegal aliens.
how much will it cost and how much effort will it take to achieve that? if you ballpark the cost to embark on such a project of the over 10 million estimated undocumented immigrants in this country is something no one can quantify. we don't have the research or the infrastructure or a system in place embark on a project of anything similar to that. in terms of building a wall come to think about how you would put it in place and get that through congress to make that happen, there's no question these policies are popular with his core base. it's something he continues to gain traction with but the reality is something that is in the distant future. his rhetoric last night destiny hopes of those republicans who wanted him to adopt a more gentler tone.
those waiting for the donald trump pivot, will they be waiting a long time? will always be donald trump. when we think he moves in one direction as in this unexpected visit to mexico, he always comes back to the core of his campaign and that is him with fiery rhetoric and the things that made him win the primary and brought him to where he is. he has failed to show he can pick up numbers beyond the high 30's in terms of attracting voters to his side and at acting independents and swaying counties that might lean democratic but have struggled in this economic recovery. people who don't feel the momentum in their paycheck or job prospects or providing for their families. demographic being run over? we have yet to see that in the
polling numbers. any need forere the clinton camp to respond to yesterday's event? >> they have responded in terms of calling it amateur hour his visit to mexico. if he continues to wait it out and have the press cycle beyond donald trump and stand in the background and only take pot shots at him without defining , is her candidacy is about that going to hurt her? the polls are tightening in the last two months of this campaign. mark: great to see you, thanks for joining us. two men at 1:30 p.m. new york time, an interview with ruiz massou for her thoughts on donald trump's immigration policies. still ahead, bill gross recommending the fed raise rates as early as march while
vonnie: you are watching bloomberg markets. mark: from london, i am mark barton. the friday jobs report could provide a window into whether the fed rate is raised this month. bill gross is recommending the federal reserve raise rates twice by as early as march. the market does not expect that degree of monetary tightening even by the end of next year. he made his comments yesterday on bloomberg. rates byraise interest 25 basis points in december and 6-9 months ago, let's do it again. let's realize that capitalism can survive but it can do well -- it can't do well with negative or zero interest rates.
economists estimate 180,000 jobs were added in august and check out the survey. there are informal whisper numbers. you can put your own forecast into a bloomberg league of champions. is desk to the market and abigail doolittle. >> the broad markets may be down slightly but we have lots of big losers. looking at the shares of salesforce.com down sharply. we talked to the customer relationship manager. takened earnings were
below by as much as 17% and revenues by 9%. they have stiffer competition in the cloud business but the street is still bullish, 90 4% of analysts say to buy the shares. is campbell soup having its worst days in may 20 after the company's full-year guidance was below street consensus. at looks like the weakness the due to the company's fresh food business. the company plans to cut $300 million in expenses. costco is lower as august ed versuse sales miss the estimate of 1.3% up. it's down 3% on the year and today is the biggest drag on the nasdaq. another laggard on the day is tesla. reportare lower on a about a liquidity squeeze saying the company in the proposed would with solar city
have to pay bondholders $422 million. they plan to raise capital by the end of the year to fund the post merger. debt here.ts of we take a look at a chart of the combined data of these two companies of the merger goes through. billion and that's one issue that elon moscow tesla is facing. mark: thanks a lot. the switzerland banking industry is can -- continuing to shrink and we will fight and out wide next. this is bloomberg. ♪
let's go to the first word news. british prime minister theresa may has set out her first redline for british negotiations. to end free wants movement of people coming to the u.k. from the european union. to suggests she is willing lead their single market to do that. the chinese high line on the hong kong democracy will be put to the test on sunday. voters will choose members of the legislative council to years after students block to the streets to protest election restrictions. faceemocracy reporters stiff competition and the chinese government has blocked to six candidates from running saying they don't support the hong kong basic law. president obama's traveling to one of the most remote corners of the ocean to amplify his call for global action on environmental protection. he will visit midway atoll asia andappy between
north america. he said the government will spend money to prevent wildfires near the lake and provide funding for geothermal research. a new: health care attitudes funds nearly half of all americans are concerned about traveling to places in the u.s. where people have been infected with zika. the kaiser family foundation survey found 48 percent would be uncomfortable traveling to areas affected by the virus. that way about traveling to perrigo or other areas outside the u.s.. 24 hours a day, powered by more than 2600 journalists and analysts, this is bloomberg. mark: thank you. banking jobs in switzerland are becoming swears. is home to ubs and credit suisse and smaller private banks.
a new survey by the nation's main bank association showed it caused harm to reduce their domestic workforce by 4.1%. junius from geneva is charles broome. talk is through the reasons why swiss banks are cutting their workforce? >> there is a variety of pressures on profitability in swiss banking at the moment and that resulted in the 4.1% decline in jobs in the first half of the year. that is make celebration over last year's 1% decline. you have everything from negative interest rates from the nation's national bank implementing negative rates for more than one point five years down to activity down the first half of the year. depressing revenues. also the decline of banking secrecy which roils the swiss private banking industry.
mark: there are great statistics in this report with banks operating the country fell for a 10th consecutive year in 2015. is that trend reversible? >> i doubted, not for the next few years. we have 200 66 banks operating in switzerland at the end of last year down from 275 a year earlier. it was north of 330 about 10 years ago. a lot of the foreign controlled banks are revising their strategy and pulling out of swiss private banking. bank of america merrill lynch, morgan stanley and royal bank of scotland have pulled out in recent years and there is more of those global names with drawing from swiss banking. it's an ongoing consolidation in the sector. vonnie: what's driving them away? it's one of the only businesses
that are profitable. it's hard to see a way out of this. in the first six months, you had the big banks cutting jobs and you have the foreign banks declining. christmas private banking, there are a few local players that are taking advantage of this trend. there are a few in zurich and geneva. there will be some winners from this but certainly the industry is under pressure at the moment. singapore, hong kong private banking is surging. abroad the operations but what about the operations of the swiss banks abroad? that is the silver lining.
if you look outside switzerland, a lot of the swiss banks are hiring furiously. credit suisse is hiring in asia and they posted in the first six months of the year about the highest gross increase i can recall. have a lot of hiring going on in singapore and hong kong and emerging markets and a lot of hiring going on in european countries due to market access restrictions. that means doing business with europeans remains difficult indeed. if you are looking at a job with a swiss bank, perhaps you need to look outside the country. mark: thanks a lot, great job. a really important programming note -- tomorrow on bloomberg television, don't miss a very rare and exclusive interview with the russian president ourimir putin speaking with
editor-in-chief so too in all day friday to watch that exclusive, that conversation with the russian president. on monday, you don't want to miss our special hour-long raret revealing extremely interviews with the russian president. it's on monday at 12:00 p.m. monday and 5:00 p.m. london. this is bloomberg. ♪
disappointing. he is confident apple will prevail. has that brexit about impact of the european discount airlines? we will hear from the ceo of ryanair. the use ofattle over drones in the united states is the subject in today's story. the fight over regulating them is heating up in washington. tim cook says he is confident the company will win the battle over taxes with the european union. he spoke with an irish broadcaster about the eu decision. it's maddening, it's thatpointing, it's clear this comes from a political place. it has no basis in fact or in law. unfortunately, is one of those things we have to work through.
he have faiths that the right outcome will occur and he says apple will send that spend some of its billions in the u.s. next year. british factories of bounceback the post-brexit slump. manufacturing in the u.k. restate 10 month high in august which was better than economists had forecast. the recentrose with drop by the pound. that has been a major factor. the chief executive of european discount airline ryanair says fares collapsed after the brexit vote. michael o'leary says the concern is ticket prices keep falling. down 9% this were summer which was more than expected. for the first time in more than two years, gambling revenues have risen in macau. iny took in 1.1% more august.
china has cracked down on corruption and scared off highrollers. the economic slowdown has also hurt macau. takee: time for our quick what we give you context and background on issues of interest. drones have patrolled the skies above pakistan and of denniston and yemen and now there is a debate in the u.s. over plans to let the unmanned aircraft take flight for commercial purposes. it's a ways off as regulators grind away at the rules. the use of small drones has exploded getting a danger to pilots and privacy and security. in june, the u.s. faa issued new regulations on commercial drone use that were far less restrictive than its earlier rules. they said it would begin licensing commercial drone pilots. new regulations generally permit low-level flights that remain with inside of an operator. they don't go over people.
and amazon and verizon have agreed to help the faa develop a traffic control system for drones. amazon has proposed setting aside airspace for high-speed drone deliveries. domestic drones can betray back to the 1917 kettering ariel no known as the bug which was meant to fly in a straight line until a timer cut the engine and dropped its bomb wherever it had to be. fly a drone into a war zone and quite another over the u.s. with its dense mix of private planes and helicopters and airliners. benefits ofe civilian drones will ensure their adoption. the use of drones to target at the mexican -- u.s. border has inspired fears they will be used to spy on american citizens. unresolved are technical questions about the reliability
of them and those who control them and how to avoid midair collisions. you can read more about drones on the bloomberg. that is your global business report. the french liquor maker pernod is trying to put -- improve on his 2% profit growth. it is reorganizing its business in china as sales of their flagship brands of vodka and shivers perrigo -- and shiv us - chivas regal decline. why'd you feel the need to cut costs to reorganize your business in china? >> china is changing. we are to adapt to the new normal in china.
we want less dependence on the high-end of the market. we try to leverage the size and breadth of the portfolio to sell more premium brands to attract emerging consumers. we also try to create a dedicated sales force for those premium brands to target the new emerging channels. when will sales return to growth in china? it's a market that has been hit by the crackdown on graft. 9% ande seen sales from whiskey sales have shrunk by 10%. can you give us an idea when you will receive a return to growth in china? confident been quite to return to growth midterm. chinesehe leader in the market and have a full portfolio and i think we are well-placed to adapt ourselves to the new conditions of the market.
there are still some uncertainties on the timing of the return to growth but definitely for next year, we expect to have a better year than 2016. looking to cover half a billion dollars worth of costs by 20 20 yet you are implying a new salesforce in asia. where will you cut costs? in a topline growth environment, it's positive for us to be focused. we have started to implement efficiency roadmaps until 2020 which is about being more efficient in our operations in the supply chain. we are going to be better in our management and our lead times including our procurements and
also our manufacturing optimization. 200 million deliver euros from gross savings and half of it to support our brands. with the drop in commodity prices, what to you for a safer commodities in the year or two and how will it impact your business? >> it's good news for us. the low prices are positive for the cost of goods in our business. the lower cost of grain which has stabilized in the past two years is a key ingredient for our products. hand, the cost of spirits has increased a little bit as well as sugar. et i think it's positive but we don't expect this to significantly impact our market going forward. vodka is your big
brand. you have launched a premium version but we learned that on organic basis, sales fell by 4%. does that mean you're effort to boost your absolut brand are failing? u.s., at all, in the sales are improving. brandt to stabilize the midterm but it takes time. this fiscal year was better than the previous one. were -5% and now it's only minus two. there have been improvements and we take into account the restocking of the brand in the u.s. and we a plan in place have strengthened the activation of the brand in the field and we
have a new campaign on air and we have launched some newer innovations on the brand. the rightt in place step of measures to be able to improve the performance and the brand, in particular in the u.s. vonnie: you completed some acquisitions recently. do you anticipate consolidation in the spirits industry in the coming months? do you have more acquisitions? m&a is a growth lever so we focus on organic growth. we focus also on innovation. m&a can be a good complement to it. we want to manage our portfolio actively with entries and exits and can sell some non-core brands whose profiles are not attractive and we are interested in doing some acquisitions in
lose it when the banks can monitor employees to see which one startupessed? is working on such technology called human eyes. joining this is the ceo of human eyes. this is a fascinating concept. how does it work? how does it tell what emotion i'm feeling? motion itself is very context dependent but the ideas we carry around sensors with us all day, either id badges or cell phones that measure a lot about what we do in the physical world. by mining that data and how people talk and your tone of voice and your volume and how quickly you speak and who talk to who, you can get very detailed and how people are communicating and how physiologically aroused people are. you can use that to make predictions about how productive they are at work. vonnie: i believe you have a device with you. >> there we go.
vonnie: do i carry that around and it measures how fast my heart is beating? is it like a lie detector? you can think of this device as a next generation company id badge. rfid andting id has that's what we use. it does not tell you how people are collaborating so we have cand microphones that it measure your heartbeat but it can measure a lot about how people communicate and move around in the workplace. mark: if you use this all the time, if you are a bank, to monitor your employees, some might say there is a slightly 1984 dystopian vibe to this. does this encroach on privacy? way. you do it the wrong
what's critical is to get additional regulation around the space. when we deploy technology, we give people fake badges if they don't want to participate. individual data to companies, only aggregate statistics. individuals can access their own behavior but that helps balance the individuals balance and shows you how to change how you work. it shows the company how to change training programs and them to be like the moneyball for business. mark: do you think applications will be used by all companies and the future? think eventually that will happen. we have been deploying this technology in many different sectors of finance and technology and energy even quick service restaurants.
there is a famous saying that you cannot manage what you cannot measure and we have not been able to measure how people interact and collaborate in the real world. that's one of the most important parts of work. we now have the tools in the real world and essential data to do that. vonnie: who is funding you? >> we have a number of investors . our customers are global fortune 2000 companies. vonnie: you are still raising money? a we recently did our series and we are as profitable as we want to be. very much focused on continuing to grow and we will probably do some fundraising next year as well. mark: are the banks latching on? we have a number of fortune 500 banking clients in the u.s.
and we are starting to sign up some in japan which is our second-biggest market. a lot of them are focused on these big problems like they don't know how much does management talk to the investment team? they have no idea about basic things and given their appreciation for numbers, we can show them what behaviors drive value for the company. stiff upper lip in england so we have no emotions oh it would not work on us. vonnie: i can tell that's a lie and i don't have a device. volkswagen sales are down 9% in august of europe and closes next. ♪
you are watching the european close on "bloomberg markets." we are going to take you from san francisco to washington, and stories out of london and moscow. it is what we are watching. u.k. factories reached a 10 month high in august as a weaker pound boosted income. -- r the sendingthe fed treasuries to their worst month since june 2015. we will talk to the head of rates research on which trades russia'soring and vlad